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Consent To Let Guide: What You Need To Know

A consent to let agreement allows you to keep an existing mortgage in place while renting out your home, giving you flexibility and avoiding the cost of a buy-to-let mortgage

TABLE OF CONTENTS
  • What is consent to let?
  • What are the benefits?
  • What are the downsides?
  • How do I get consent to let?
Important Note

Our website offers information about investing and saving, but not personal advice. If you're not sure which investments are right for you, please speak to a qualified financial adviser.

The value of investments, and the income from them, can go down as well as up, so you may get back less than you invest.

What is consent to let?

When you take out a traditional mortgage, it will state in the conditions that you are not allowed to let out the property. A consent to let agreement (also known as ‘permission to let’) alters the conditions to permit letting.

Consent to let agreements are typically for fixed periods, usually between six months and two years. They are not a long-term solution for landlords but can be handy when you are looking to temporarily relocate or as a stopgap while you move house.

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When the consent to let period runs out, a mortgage reverts to the original conditions. If borrowers want to continue letting out their property they would have to re-mortgage to a buy-to-let mortgage with rates that are usually significantly higher.

Borrowers can expect to pay interest rates that are on average 48% higher when shopping for a buy-to-let mortgage over the residential mortgage equivalent. [1]

Your lender may charge for providing consent to let, either as a fixed fee or an increase in interest rate, and there are other criteria to meet before it is granted.

To get to grips with the economics of property investing try our Buy-to-let calculator, which also works with consent to let. Input your mortgage rate, expected rental income and income tax band, to get an indication of profitability.

Buy-to-let calculator

Check the economics of a buy-to-let investment

Why might people apply for consent to let?

As consent to let is temporary, mortgage lenders will ask why you are applying to make sure you aren’t planning to let the property for the long-term.

If you live inside a commuter zone but are working from home, you could take advantage of consent to let by temporarily relocating to a cheaper area.

Historically, some of the most popular reasons for seeking consent to let have been:

  • You are temporarily moving for work
  • You need to move in with a family member to assist with care
  • You want to move in with your partner

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What are the benefits of consent to let?

Consent to let gives you flexibility and can often be cheaper than a buy-to-let mortgage if you want to rent out your home.

If you are willling to relocate to somewhere cheaper, you could potentially earn some extra income.

It can be valuable for those interested in investing in property, as it gives you the experience of being a landlord, which could also make it easier to get access to certain buy-to-let mortgages in the future.

Other examples of scenarios where consent to let could be a good option:

  • You are looking to sell and the property market is in a slump, so decide to let the property and see if it has improved in a year's time
  • You want to sell but have time left on your current mortgage deal and want to avoid paying an earlier repayment charge
  • You are looking to sell but cannot find an immediate buyer so rather than the property staying empty decide to rent it out to cover the mortgage

What are the downsides of consent to let?

While consent to let is cheaper than buy-to-let in most cases, it’s not always cost-free.

Some lenders, such as Barclays and Virgin Money, give consent with no additional charges. Others, including Nationwide and Yorkshire Building Society, increase the interest rate on the mortgage by around 1%. You should check with your lender to find out their terms.

On top of these charges, you’ll have to arrange and pay for repairs and maintenance during the tenancy, so it’s a good idea to not rely on the rental income.

If you can’t find a tenant, you’ll have to continue making mortgage repayments out of your own pocket on top of meeting the rent or mortgage costs of your new property.

You will also have to meet all of the other costs of being a landlord which can include:

  • Property maintenance
  • Landlord’s insurance
  • Cost of engaging a letting agent to market and manage your property
  • Health and safety requirements including certification for gas and electricity
  • Tax on income from rent and capital gains on house price changes
  • Administration costs, such as fees for drawing up tenancy agreements

How do I get consent to let?

Most mortgage lenders will be happy to help you with a request for consent to let, but there are some likely restrictions that you should know about.

  • Your lender is likely to make sure that the rental income can cover your current mortgage repayments
  • Most lenders require you have been living in the property for at least six months after completion
  • You might need to have a certain level of equity in your home
  • Help to Buy and Shared Ownership mortgages often contain clauses forbidding letting out your property. In this case, you may need to switch to a standard mortgage first
  • There may be additional restrictions if you wish to let the property out to family members

It can take several weeks for consent to let to be approved and until it is in place you can't start letting the property, so get your application in early.

Where should I move to whilst renting my property?

If you've decided to apply for consent to let, remember to look at our UK rental yields page which will show you the average cost of renting across the UK. The page can help make sure you are getting the most for your money.

Remember if you are thinking about property investing (including consent to let) to try our Buy-to-let calculator. It will help you get to grips with the economics of renting property - accounting for income tax and fixed charges which you can adjust to see how it affects your income.

1 Based on the lowest interest rate available for residential and buy-to-let mortgages at either 50% or 75% LTV with either a two-year or five-year fixed term. Compared rates from most major UK providers.

Relevant tools

Buy-to-let calculator

Check the economics a buy-to-let investment

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